Investors Experience Rs 9.28 Lakh Crore Loss as Stock Markets Decline for Second Consecutive Day

Investors faced a challenging day on Monday as major stock indices fell to their lowest levels in over seven months. This decline was due to widespread selling amid uncertainty about US trade policies, resulting in a loss of Rs 9.28 lakh crore in market wealth. The market capitalisation of companies listed on the BSE dropped by Rs 9,20,654.51 crore to Rs 4,10,31,199.48 or USD 4.75 trillion.

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The BSE's 30-share index saw a significant drop, falling by 824.29 points or 1.08% to close at 75,366.17, a level not seen since June 2024. During the trading session, it reached a low of 75,267.59, marking a decline of 922.87 points or 1.2%. The market breadth was negative with 3,588 shares declining, 532 advancing and 114 remaining unchanged.

Market Sentiment and Sectoral Performance

Ameya Ranadive, Chartered Market Technician and Senior Technical Analyst at StoxBox, noted that volatility increased due to several factors. These included anticipation around the fiscal budget, concerns about slowing corporate earnings and uncertainties related to the upcoming Federal Open Market Committee (FOMC) meeting. Geopolitical tensions and continued selling by foreign institutional investors further dampened sentiment.

Mid and small-cap stocks were particularly affected by heightened volatility as higher valuations led to sell-offs in these segments. Among Sensex shares, HCL Tech experienced the largest decline at 4.49%, followed by Zomato, Tech Mahindra, PowerGrid and Tata Motors.

Other notable declines included Infosys, Tata Steel, HDFC Bank, Reliance Industries and Bharti Airtel, which contributed to the index reaching its lowest point in over seven months. However, ICICI Bank bucked the trend with a rise of 1.39% following positive third-quarter results.

Sectoral Indices and Future Outlook

The BSE SmallCap index fell by 3.51%, while the Midcap index dropped by 2.68%. Among sectoral indices, telecommunications suffered the most with a decline of 3.83%, followed by IT at 3.34%, Teck at 3.04%, Metal at 2.86%, Healthcare at 2.73%, Industrials at 2.63% and both Oil & Gas and Commodities at 2.42%. Utilities also saw a decrease of 2.41%.

Looking ahead, Ranadive suggested that market volatility is likely to persist due to uncertainty surrounding the Reserve Bank of India's Monetary Policy Committee meeting next week and the ongoing FOMC meeting this week.

Exchange data revealed that foreign institutional investors sold equities worth Rs 5,015.46 crore on Monday.